TheDumbMoney (60.32)

Why You Should *Maybe* Buy a House

7

Here is my post from about a week ago on why the argument against buying a house is not as strong as some currently say it is -- in a post-crisis fad. Additionally, I should say I think a lot of the argument against buying is driven by a rather typical post-crisis fear hangover and also by ideological opposition to the mortgage interest deduction.

From what I've heard right now SC real estate with the exception of a few coastal counties is rather reasonably priced.

If the property condition is okay and the neighborhood is not depreciating in value, it makes sense to put some money down for the privilege of paying a couple hundred dollars less per month for a mortgage than one would pay to rent the identical property where the rent can go up and one might possibly have to move out before one wishes to.

True. That's why I say maybe. What I'm responding to is the current fad/meme that buying a propety is always a bad investment, which I think is based on a false reading of data, as well as ideological opposition to the mortgage interest tax deduction. Just as politics should be kept out of the process of investing in stocks, it should be kept out of the process of considering a home purchase. And in all cases, all data should be examined.

This is a good time to buy real estate, but not as good as 2 years ago. However, it might not be a good time for a specific person to do so.

I have been debating the purchase of another rental house next spring, and am a bit torn. Based upon my current investments, I am confident I can turn a nice profit on another house, but the time investment can be a drag. It is tempting to just put the money in a low effort, still good return such as my current retirement asset allocation model. A year ago buying another house would have held greater profit potential and two years ago would have been an easy decision.

Three years ago, when I bought, it was a very easy decision. It does depend on the person. What I'm basically talking about is, if one is going to employ debt, the low interest rate on a 30-year fixed loan could be a hugely good deal. I'm also not really talking about second homes/rental properties.